Developing the economy is more than recruiting

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By Harold Morgan

We whine about being a federal colony, but, by God, protect those federal laboratories.
Such ideas are what masquerades for deep thinking about the New Mexico economy.
Recent presentations from Gov. Susana Martinez and Jon Barela, secretary of the Economic Development Department, have considered economic development.
From both, the only specific was recruiting companies to the state.
Recruiting is good and necessary, but for that to be the only topic massively misses the point.
Recruiting companies, which is what “economic development” is about, is just part of developing the economy.
Further, recruiting companies only matters at the margin for New Mexico’s 870,000 (or so) employees.
That said, the state has some talented professional recruiters. Hobbs, Roswell, Farmington, Tucumcari and Albuquerque come to mind. Support them. Give them money.
One national phenomenon probably similarly affects New Mexico. No good state numbers are easily available for comparison.
Apparently — I digress here — no good state job numbers are available at all. The Department of Workforce Services reports numbers but then says the situation may not be that bad (or that good) because of “a statistical anomaly in Current Population Survey data…” or something else mystical.  
Edward Lazaer of Stanford’s Graduate School of Business says that, nationally, about as many people are being hired as during the depth of the recession. But employment, overall, isn’t growing much.
We’re just laying off fewer people.
Numbers from the federal Department of Labor suggest the national phenomenon may be happening here.
The numbers are year-over-year change in new claims for unemployment compensation.
During the eight weeks of March and April 2009, new claims were up more than 1,000 per week for six of the eight weeks.
For four of the nine weeks of March and April 2011, there were fewer new claims than a year earlier. Weekly increases ranged from 13 to 815.
Modest year-over-year job losses continue, which means our improvement comes not from gains, but from fewer losses.
The newest seasonally adjusted federal job numbers show New Mexico with an April 2010 to April 2011 drop of 4,700 (or 0.5 percent) in the labor force, a trivial 2,500 increase (0.3 percent) in employment and a half point drop in the unemployment rate to 7.6 percent.
Another view of economic development came Good Friday when City of Albuquerque Economic Development Director John Garcia gave the world a look at the city economic development posture on page two of the Wall Street Journal.
Referring to a proposed company location, Garcia said, “Truthfully, we got a little queasy, and we pulled out.” His second best line was, “We’re hurting pretty bad here.”
These discussions are about “wage jobs,” the jobs included in the numbers. The discussions omit the more than 121,000 New Mexico firms without employees in 2008.
I am one such firm. I have a gross receipts tax number and pay the tax, but I do not “employ” myself.
Also left out is the informal economy, those unrecorded cash exchanges, such as Christmas trees, which might be harvested from family owned land, brought to an urban area and sold for cash.
I suspect the economy is most informal in the northwest and along the Mexican border.
The sash of decline across the state from northeast to southwest is ignored when the development conversation only includes recruiting.
Companies aren’t moving to Roy or Vaughn or Animas. Some of New Mexico’s economic issues are easy; yes, do something about the pit rule. Yes, recruit companies.
Mostly, though, the issues are complex. Solutions will take time — years.
The solutions do not include nonsense such as dental school for the University of New Mexico or whining about being “a federal colony.”

Harold Morgan
© New Mexico
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